Every day we’re hearing of a company running through a round of layoffs or going out of business, it’s really not a happy time. Sony is not immune to the economic troubles either. Sony is talking restructuring and that involves a potential head count reduction of 16,000 jobs due to plant closings.
This leaves Sony with some hard decisions. Restructuring can mean drastic changes that effect all their product lines. The PlayStation 3 isn’t currently a shining example of high profit margins. The console needs time to reduce its overall cost, chip sizes and bring profitability. Is it in danger?
“Sony’s not in a position to halt all domestic production but it has to do something that drastic,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive.” (gamestooge)
The yen is losing value in our global economy making it more difficult to export the product and build any type of profitability plan. “A source said this month the company will likely suffer an annual operating loss of about $1.1 billion, its first such loss in 14 years” (news.yahoo.com) All this noise is making CEO Howard Stringer contemplate Sony’s involvement as a “software only” company, making us recall the changes at SEGA to this same result.
The Financial Times reported Sony will unveil details of its restructuring steps on Wednesday or Thursday. It said Chief Executive Howard Stringer was meeting with resistance from some executives to shifting the company’s focus to software from hardware and cutting jobs in Japan. (news.yahoo.com)
Is this just a case of a fearful executive trying to lay plans for a more stable future? Software is easier to develop, pays for itself quickly and becomes pure profit as it ages. Hardware requires constant upkeep at manufacturing facilities, chip reductions and a boat load of quality planning for first shipment. Would Sony go full software?
Let’s face it, Sony isn’t SEGA, they’ve been developing hardware for consumers since anyone can remember and they’ve been doing it with quality and market penetration. It seems absurd to think they’d forgo hardware designs in replacement of a full software solution to the problem. In addition, Sony has already invested a large amount of cash into seeing PS3 through it’s 10-year plan and letting that die now is realizing a huge loss on investment.
If Sony pushes through the economic and maintenance course, the PS3 will become highly profitable, much like the PS2 last generation (with a slower ramp up for sales). Even if they break even after ten years it seems a lot better than throwing all the effort away.
Perhaps Howard Stringer is talking “software” for the next generation home console? You think Sony will create a PlayStation 4?
Great episode and nice to see quick turn around for this!
@Indi Dev: Not sure there is much to add that hasn’t already been said. I hope that the Dev can fix his situation as Paul was pointing out it did seem like he was very unprepared for managing this. I still feel that this is a sign to be cautious with Kickstarter, but not out right abandoning it. As Jonah pointed out there were worse cases.
@Fallout 4: I am looking forward to this game, also FO series wasn’t always First Person perspective, it used to be Isometric like Wasteland 2. So for some Wasteland 2 is like having a Isometric Fallout 3.
I loved the trailer, the color scheme seems so much more alive than in FO3 and FO NV. I think I prefer a voiced protagonist so I am looking forward to that as well.
@Steam returns: I can see how this can be easily abused, however I too have a lot of games on my list some I want to play and some that I don’t have any intention of playing but got through others or through Humble Bundle. Also when games start being like $2 it’s really harder to feel that need to resist.
Now here’s a Question since it’s been awhile for a QotW: Which do you prefer a Voiced protagonist (or one that talks at least via text if not voice) or a Blank slate (Chrono, Link, Mario, etc)